Last week, the New York Times asked a provocative question: Do activist investors target female CEOs? Its article by that name considered whether the increased scrutiny that female CEOs attract, from stakeholders inside and outside the organizations they lead, can be attributed to their gender. The article gestured at a phenomenon receiving significant attention in the press of late: the glass cliff. One author summarized this phenomenon as follows: “You’ve shattered the glass ceiling. You have it all. Now don’t fall over the edge.”
The glass cliff is a term coined by psychology professors Michelle Ryan and Alexander Haslam. It encompasses the unique challenges confronted by female trailblazers. They are often difficult to describe, much less name, much less overcome. They may be as blatant as paying female CEOs less than male CEOs for the same work. They may be as subtle as expecting women to perform “office housework” or attributing failures to female leaders despite problems that predate their leadership.
Our antidiscrimination laws are poorly suited to eradicating many of these disparities. Even assuming their protection extends to female CEOs – which is not always the case – they often protect women from only the most blatant and egregious discrimination in the workplace. They are ill-matched to the more nuanced yet pervasive stereotypes and assumptions applied to female leaders. Creative lawyering has stretched these laws to reach increasingly subtle forms of discrimination, yet many of the disparities women now confront would stretch existing laws beyond their breaking point.
The case of activist investors is particularly troubling. Assuming it is true that investors specifically and intentionally target certain companies because they are led by women, our laws are powerless to curb their behavior. Their discriminatory tastes may offend our notions of equality and fairness, but they don’t run afoul of any law currently on the books.
Where litigation falls short, we need other tools to raise awareness and combat gender discrimination. The studies described by the New York Times can play an important role in bringing investment patterns and preferences to light, forcing portfolio managers to take a hard look at their strategies, and making them accountable for their choices. More broadly, they help us identify and understand the types of challenges that place female leaders on the brink of the glass cliff and demand from all of us greater awareness and renewed commitment to equality in the workplace.